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tv   Mad Money  CNBC  October 16, 2012 6:00pm-7:00pm EDT

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>> short city. >> dominos pizza, the most underrated spectacular stock. >> i'm michelle caruso-cabrera, be sure to i'm jim cramer and welcome to my world. >> you need to get in the game. >> he is nuts. their nuts. they know nothing. >> i like to say there is a bull market somewhere. "mad money" you can't afford to miss it. >> i'm cramer welcome to "mad money." i'm trying to save you some mon money. call me. what happens when the positive facts get in the way of the negative story? i'll tell you what happens?
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you get the best back to back rally in agents. >> house of pleasure. >> s&p 1.12%. ♪ hallelujah >> and yeah, friday had a descent day too. >> let's face it. we came into the the earning season with a full head of glue. the earnings have peaked. with the impending government spending crash as well as a lack of unemployment growth, what did you want to do when you heard that? that was the wrap. but these last few days we have been at odds and the facts are threatening to overwell many the tale of woe. 1.1% gain on top of a 1.2% gain.
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those are the first back to back numbers. people trade on them. and today we have industrial production a 0.4% gain. that seems meager. it shows a big jump from the 1.4% decline in august that caused lots of industrial stocks to will on the vine. let me be blunt. the numbers yesterday and today they weren't supposed to happen. they don't fit the thesis. i look at things from the bottom up. meaning the company level and not the top down. to me, one of the reasons i told you to stick with this market because of the endless doom and gloom. is because the individual components of the brood numbers, they said don't give up the
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ship. they said i'm happy. no, i'm like stuck listening to the calls when every one else is having a good time. that may have surprised the market but not me. why? yoo thi jud judge think about it. >> from vf corp. in from ralph lauren. we have seen increase and williams sonoma hit an increase. last but not least. we have had dynamite retail sales from the iphone 5. could that be why stocks are headed in the right direction? we know that a lot of money comes from the consumer's
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balance sheet. it is part of the qe 3 thing? the boom went to mortgages and refinances. jp morgan, wells fargo and citigroup. i will be addressing the change in regime later in the show. i can tell you that no one was expecting this. when we see that employment is weak we can't fathom strong dee department store sales. we are stuck with the positives. why lot of people strangely don't like it. we are on pace to sell 1.8 million autos. we were doing 9 million the year before that. the boom time level figures and the boom doesn't fit with the boom. and gm is doing poorly
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elsewhere. but in this country. the numbers say go with the boom. call me a numbers guy. how about the manufacturing figures? we know europe is weak. what matters to the market is the trajectory. we were headed down and now we are headed up. we know that our oil bonanza has caused a huge amount of intrastructure. we know that our natural gas has caused companies to take advantage of our lowest cost supply with the stuff. biggest oil discovery perhaps in years. we see the orders and we know the industry, that pause button had been hit in august. there is no daoubt about that. this rally tells you that we
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have no longer on mute. okay. here is an obvious one. it is an election year. we have a president who is reluctant to talk about how strong the data is. i can't blame the guy. you can only imagine the spin. it is only the rich who are doing so. we have a challenger who talks about how weak the economy is. no one can champion the facts i'm talking about because the political story can't fla y in e face of the political numbers. we aren't trading the numbers. we are not making book in vegas. we are investing in the stocks and companies who may do better still in 2013. these still production and
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retail production confirm my analysis. the negativity smacks for affliction and fact. for everyone who wants to hold on to the pessimistic these sis, when the facts change, i change my mind. what do you folks do? bruise bruce in my home state of new jersey. >> booyah from ocean grove. >> say hello to my place down there. what is up? >> i've been a long time holder of johnson controls. you know, will it be a spark for them or what is the story or are they going to be flat like they have been? >> you are only one town away from asb umtury park. you do not have a spark in it.
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do somewhat i call selling. i think it is going to have an awful quarter. positive facts in a negative story. but i'm stuck with the facts and they ain't that bad. "mad money" will be right back. >> coming up. you ask we answer. >> linen gy, would you recommend picking up linco? >> he's back with newly minted stock on the street. find out if this could open the bell on profits and later, piping hot delivery. dominos serve the street with a better than expected quarter today. but is the run over or could the 10,000 stores be cooking up more
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returns. plus, shock on the street. >> is stepping down as the ceo of city grove. >> the coo and ceo are both out. speculation continues to swirl over what happened. don't miss a second of "mad money." follow on twitter. tweak cramer. send jim an e-mail. or give us a call. miss something? head to "mad money." bob...
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there is nothing more important than having some yield. nothing. most vindividual investors are
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under the impression that the way you make money is that owning stocks is by powering higher. that is only half the story. something like 40% of the gains from owning stocks came from getting that dividend and buying more stock with it. buy buy buy. we want to own stocks that go higher but we need to buy stocks that have high yields. the returns from bonds and sertiser t sertive cats of deposit bring me to the call that i got last thursday. simon, california. he asked a question about lnco. it is a company that came public last friday. i was caught not ready. you might wonder why it exists. the company's sole purpose is to
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own units in energy. it happens to be a partnership. but what is the own debt of that? like detra? i've been a fan of lin energy for decades. ♪ hallelujah in may of 2009 i said, wow, these guys know how to drill. they own a whole host of oil and gas properties across the united states. they are able to maintain or grow cash flow. they are not squash buckling drillers. they are the opposite of wild caters. but the production is 100%
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hedge. i look at the high prices. you don't have to worry about volatile commodity prices. since 2003 the company has made 54 acquisitions for a total of $10 billion. during 2012 alone the company bought 1.2 oil and gas properties in the kansas basin. bp was so strapped for cash. boo et boo! . and in july line hit up bp again and acquired 23% interest in the field in exchange for recovering $400 million. it is a tremendous company with
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a fantastic growth prospect. considering in five years stocks give you a 123% return. however, europe line has a flaw. and that flaw explains why they created linco. the problem is this. line energy is not really a stock. it is a master limited partnership. the rules about how the mlp's are taxed are different than the rules regarding the taxation. these rules make mlp's very unappealing to certain types of investors. bear with me for this. if you own an mlp like line
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energy, you might end up paying taxes on distributions. something called the unrelated taxable business income. the whole point is that you don't pay taxes for years or years or decades. you withdraw the money when you retire. think about all the big pension funds out there. they would be fools to invest in limited partnerships. it is complicated. regular companies pay limited distributions. it means you don't end up paying taxes on the distrybutions. it means that you have to talk to a tax professional and you will have to do a lot of additional paperwork and it might trump the amount you might
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make. and that is where linco comes in. all it does is own units of lin energy. it is not a master limited partnership. it means you can own linco in your ira and not get hit with your own business tax. it did so in order to raise capital. it raised $1.1 billion. it can use l ichtinco to invest business. it pays out 2.90. every quarter it will pay distributions to linco. then linco has to pay taxes on that money. and whatever is left after the taxes linco will pay to you in the form of a regular dividend that doesn't have that business tax that i talked about.
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if lin energy's distribution remained at $2.90, wala, that gives you a 7.2% yield. it is higher than the 7.1% yield. linen gy has a longer track record. so here is the big question. you have to ask which one is right for you? for regular ip ven verters there a lot of headaches for you. the yield is practically the perfect retirement stock. i'm so glad that this guy calls us about this. this is what you should be putting in your ira. i would say bravo to lin energy. so that people could have exposure to the high yielding energy. it is still a terrific company
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and if you can handle the tax prep it might be better to pick at that. but i think the best choice of all is to own it in an ira. i'm not talking about the irish republican army. mark in connecticut, mark? >> jim, how are you? >> i'm fired up today. i'm fired up. >> how did you? >> thank you for taking my call. my question is about cedrill limited. i wrote them down as two that i want to come back to. i think i can give you more insight after i have done the work than before. we did this piece, they take a long time.
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i can't turn this around quickly. let's go to clarns in michigan. >> hi, jim i'm a faithful listener of your program i love it. >> i was wondering what your opinion is on it. i see they have news for construction in india and indonesia. it has run up $1.84 today. i think the future for first solar is cloudy. and i think sell sell sell. i was too negative earlier. i like line energy. but i like linco better if you are doing it for your ira. thank you. memo to staff. cdrill murphy we might our
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promise we will deliver. after the break i will make you more money. coming up, piping hot delivery. dominos served the street with a better than expected delivery today. but is the run over? in over 60 sou 0 countries, cra finds out when he delivers the earnings exclusive and later time for a turn? there is something lurking in the charts of the s&p that could mean a big move is in store. cramer helps you discover the signs and gets you ahead of the next swing all coming up on "mad money." [ male announcer ] how do you make 70,000 trades a second...
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ever since it bottomed at $29 in june, domino's pizza has been working its way back up. even when dominos launched it's new deep dish pizza, the first new cattle roughly three years ago, there were those that worried that they were not able to deliver results. but today this chain with over 10,000 stores, reported a spectacular quarter. and the stock shot up $2.92 in a single session. same store sales up 3.34%.
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international same-store sales up 5%. the company's global retail sales up 8.4%. all of this was before they lawla launched their new deep dish pan pizza. dominos has given you the 300% return. it is up 38%. i said it is a great opportunity. so what should we do with the stock. let's thek check in with patric dole. welcome back to mond"mad money." i have your new pizza out here. the deep dish. i have to read you the quote. pizza hut's kirk cane said he is not tercribly worried about it.
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>> right. you know what, we are not paying that much attention on the competition. but the pan pizza category is a $6 billion category and $30 billion pizza category and that doesn't include the frozen pizza that is sold in grocery. we are going after a big part of the business here. >> wait a second. you have an add. we are going to give, if someone asks preferred sausage or pepperoni. you have an add where you were holding a frozen pizza dough? there are competitors out there using frozen dough. and we are making ours fresh.
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that is the difference. we think that is what makes it a great tasting pizza. we are looking at anybody who is using frozen dough to make their pizza and this pizza tastes terrific. >> let's talk about something remarkable. i remember you had just unleashed the apple iphone app which i was so excited about. you say 40% of your delivery sales are now digital? >> that is right. it keeps moving. it has been a terrific part of our growth story and it is going to keep going. there is no question. consumers are going to keep shifting. customer satisfaction is higher when they order gins are higher going to see people moving that
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way. that is a positive for us and for our shareholders. you get realtime information. e sense in your digital ive us readouts how is this fairing? >> you know what, you can't go into the 4th quarter, but, what i can tell you is, it tastes terrific. we are getting good reviews from consumers out there. we make it out of the fresh hand-made dide dough patties in stores and that is what makes it specific. >> i fail but i try because that is my job. >> let's talk about what is going on domestically. you said something negative. it is a negative store count. >> in the summer it tends to be when there is a clean up. it was less negative than it was a year ago. we want to get back into
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positive territory. for the year and i think we are still going to get there. the big story is international and th continues to ramp up. on a trailing 12 month basis we are between 450 and 500 stores which was over our longer term guidance. domestic side was negative, but i'm not that concerned about it. >> but, i never have once been to a store. why bother? >> you know what, we've got more customers coming in. about a third of our business is carry-out. we were still 90% delivery. so if a third of our customers come into the stores, we have got about three dozen of these new image stores rolled out so it is still early feedback.
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it is very positive. it is going to take a while and we are still going to play around with it and tweak a few things but we like it. and with a third of our mu customers coming into the stores. >> your cashflow is so amazing here. it really crushed the stock. you only brought back a little bit of stock but it was when it was at 30. do you, want to rethink that and maybe pay a regular dividend and not flippers but people who want to invest? that is what i want. >> you are right but we are going to run the math the same way any investor would. in whatever way is going to generate the best returns. you look at it year to date. there was a bip dip in the pric.
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we are up 20% in the year. total shareholder return is in that 30% range and so you know we think it has played out well and we are going to keep rewarding shareholders however the math leads us to the best answer. we run the numbers and we will do what generates the best return. >> when you do report the quarter please come on the show. i want to know actual numbers. thank you so much. president and ceo of domino's pizza. >> well, look. they are coming in your direction and they are not giving away free pizzas after the debate tonight. i think dominos can go higher. so be careful no need to chase it but the story is a solid one. stay with cramer. >> coming up, are you ready to
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get charged up? >> cramer goes electric on a new lightening round. i'm an expert on softball. and tea parties. i'll have more awkward conversations than i'm equipped for because i'm raising two girls on my own. i'll worry about the economy more than a few times before they're grown. but it's for them, so i've found a way. who matters most to you says the most about you. massmutual is owned by our policyholders so they matter most to us. massmutual. we'll help you get there. well, if itmr. margin?margin. don't be modest, bob. you found a better way to pack a bowling ball. that was ups. and who called ups? you did, bob. i just asked a question.
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it takes a long time to pack a bowling ball. the last guy pitched more ball packers. but you... you consulted ups. you found a better way. that's logistics. that's margin. find out what else ups knows. i'll do that. you're on a roll. that's funny. i wasn't being funny, bob. i know.
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it is time it is time for the lightening round. play the sound and then the round is over. are you ready? gastone in washington. >> oh, man the seahow cans i like the way that that sherman is talking smack? what's up? >> i kind of took you off your game there, what is the stock? >> ford. >> no, there is nothing there. they can't make up. that brings down everything is happening in the united states. >> alvin in new york. >> hi. >> my stock is siri. >> huh? >> i think their captum here is
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liberty media. >> auto sales helping. >> david in arkansas. >> intel corp. i know they have been taking a hit. >> i have not been able to review the conference call. but i did not listen to the call so so i cannot cut this flt. >> let's go to pat r axt txatpr you think about align technology? >> it had a shortfall and it has been straight up. it i had a good dentist that told me to recommend it. the stock is working. let's go to alex in new jersey. >> hi, jim. booyah. >> thank you very much for helping us fied help ing figuide us through these in
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developments. dov, i bought it in the past. >> it is doing a lot to bring up value. but it is like the phillies here. but you have to wait until next year. >> john. >> john in florida. jim, a month ago you mentioned dvax. can you give me an update? >> yeah, it is a speck. but it is a speck like icis. it is bringing the stock down and now i'm nervous about it. these are specks. it is a technology and i like it as a speck. and that is the conclusion of the lightening round. >> the lightening round is sponsored by td ameritrade. >> coming up, time for a turn? there is something lurking in the charts of the s&p that could mean a big move is in store.
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after a tremendous third quarter rally. the ma market was merely treading water. we were stalled. but suddenly. 48 hours, things seem to be changing. we have two days in a row where averages rocketed higher. somebody is slamming on the gas ped al instead of all aboard. we don't want to become victims of our selves. has the market turned a corner? tonight we are going off the charts to answer the questions with the help of the technician who runs the website.
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there is a reason why we are turning to this to analyze this. she has the hot hand. he has been on a winning streak lately. all of my years of investing i have wanted to know what the hot hand has been thinking. remember, i'm shot a chart guy. balk about the 23 things that i see happening. back on june 12th, groden did tell us that it had hit bottom on the show. that was 10 points where it peaked.
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then we went back to broden and asked her what she thought it would do next. but it could be a buyable pullback. for the last month. the index was trending lower declining to $1425. from where broden told us to back off. take a look at this chart of the s&p 500. we'll make this as easy as possible for you. making it simple. when broden warned us that the s&p could be due for a pull back. she drew a line in the sand and said as long as the index held below the low of $1396, it would rebound hard. it never came close to that
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level. it went $1425. so the line held. and that means the longer term trend is very much intact. they are taking out that and it would have been a different story. but it held right there. it has been range bound and trending lower. in fact i have to tell you, because i have to prepare the segments, she was tell meeg at the end of last week, that she felt that maybe it was time. the latest decline should now be over. it has to do with something called symmetry. the idea is that the big swings tend to be the same size.
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there is no denying that it does happen. it was $48.98. keep that in mind. when you look at the last four prior declines going back to june. so all of them except the first one were similar in size. that means the decline is either done or close to being done. she sees a strong support or floor of support running from $1419 to $1427 or 2% below where the index is right now. broden is the queen. the medieval mathmetician of
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ratios. 50% and 61.8% those are the numbers in nature. many technicians can be seen all over the starts. she looks for areas where the price relationships cluster up to find zones or support or resistance and there are four of them. she sees another floor a bit lower. so the risk here seems contained and it is like rebar there. there is one more peas to this puzzle. she uses the same analysis. looking at the lengths of the
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previous moves. she looks for critical periods of time where it is likely that the trend could reverse where we could go from a decline to a rally. she sees time clusters. broden likes to add a day or two to the range meaning it could mark a team for the low. we haven't seen the bottom. but if time cycles independencade that it hasn't arrived yet, if the time cycles check off. i don't want to get trapped in the weeds here. the important thing here is as long as we have been learning, she has been dead right on using this. she has been the only person who
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has been dead right as we go through a ton of technicians looking for those who have nailed the right moves. so i take this stuff seriously. i think about gdp how high could the s&p go in her world? it could rally as high as 15.1857. the latest move makes broden more cautious. the broader analysis stands. the line in the sand remains. it drops below the september 4th line and broden says all bets are off. this is the problem with technicians. for now, things are looking pretty g we are far from the $1396 level. here is the bottom line.
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after a month, where the averages have been stuck in a rut. it is very much for real and the index might beginning the first legal of the run. perhaps one that i believe could take the market to all time highs. >> issues for america but for one state the key to prosperity. plus a special edition of "mad money." invest in america. now, that's what i call a test drive.
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this show has a long history with the now former ceo of citigroup. we didn't think he was acting fast enough to fix the balance sheet. spent a lot of team with the team. sure enough it wasn't.
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he had to report to regulators. and he had to deal with a surprising slow down and set his sights on the developing markets and the huge u.s. government stake in citigroup. something that probably couldn't have happened if he were a w horrendous operator. it was jarring to find out that he was out. he was telling people that he wanted to leave all along.
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fresh face needed. he did a good job of winding down holdings. i think they can fire the guy. you don't get your name banned from the website if the feelings are well mutual. the die had barely been cast and he was no longer in the room. this show is not about making friends, it is about making money. he gave them a good hand. as good as the one that he got. now he can play that hand.
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seconds away on the kudlow report. tonight two major world events are about to collide. hillary clinton takes the fall for the benghazi gate. and as mitt romney romney surges to 50%

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